New Delhi, Sep 3 (IANS): The Central government's target of scaling up its renewable energy capacity to 500 Gigawatt (GW) by 2030 will require an investment of Rs 17 lakh crore for long-term commitments, and it may explore green masala bonds and infrastructure investment trusts (InVITs).

However, this would also include associated transmission costs and the country would need an annual investment of Rs 1.5-2 lakh crore in renewable energy sector, against which the estimated investment for the last few years has been in the range of Rs 75,000 crore only.

To meet this huge gap between the required and actual investment, and the fact that the overall debt requirement is large and reducing the cost of financing to the renewable energy developers is important, the renewable energy ministry aims to work towards exploring innovativefinancing mechanisms.

According to sources, it is likely to look at alternative funding avenues like infrastructure development fund (IDF), infrastructure investment trusts (InVITs), alternate investment funds, green masala bonds and even crowd funding for the renewable energy sector.

Apart from this, the ministry may also explore the possibility of prescribing renewable finance obligation on the lines of renewable purchase obligation for banks and financial institutions in order to make them invest a specific percentage of their investment in the renewable energy sector, sources aware of development said.

Since green banks have emerged as an innovative tool for accelerating clean energy financing globally, the government may also explore setting up of a green bank system, which can address the persisting finance related challenges being faced by the renewable energy sector in the country.